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BANGLADESH LTD.
REPORT ON
LOCAL BUSINESS POLICIES OF NESTL BANGLADESH LTD
PREPARED FOR:
Dr. Shibli Noman Khan
Lecturer
Department of Business Administration
Independent University, Bangladesh
PREPARED BY:
Alif Al Mohammed Shalahuddin
ID: 1221557
MBA 509
Department of Business Administration
Independent University, Bangladesh
Date: 30 July
2012
Letter of Transmittal
th
30 July, 2012
Dr. Shibli Noman Khan
Asst. Professor
Department of Business Administration
Independent University Bangladesh,
Thank you,
Alif Al Mohammed Shalahuddin
ID: 1221557
MBA-509
Table of Contents
Particulars
ABSTRACT
PART ONE: INTRODUCTION TO REPORT
Origin of the Report
Objective of the Report
Scope and Limitation
PART TWO: NESTL BANGLADESH LTD.
2.1 Introduction
2.2 History of Nestl
2.3 Global Brand of Nestl
2.4 Nestl in Bangladesh
Customers of Nestl Bangladesh Limited
Functions of Nestl Bangladesh
Products of Nestl Bangladesh
PART THREE: ORGANIZATION STRUCTURE OF NESTL
3.1 Global Organization Structure of Nestl
3.2 Organization Structure of Nestls in Bangladesh
PART FOUR: STRATEGY OF NESTL
4.1 Key Success Factors
External factors
Internal factors
4.2 Marketing Strategy
Market Segmentation
Target market
Positioning strategy
Advertising and Promotional activities
Medium Responses
4.3 Competition Structure
4.4 Nestls Consumer Communication and Relationship
4.5 Retaining Old Customer or Attracting New Ones?
Customer Satisfaction Level
4.6 Market Audit
External Audit
Internal Audit
4.7 Nestls Commitment to Environmentally Sound Business Practices
4.8 The Supply Chain
Raw Materials
Manufacturing
Distribution Marketing
4.9 What Makes Nestl to Become Nestl?
Medical support
Food support
Sports Development Programme
4.10 Conclusion
PART FIVE: APPENDICES
References
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Table of Figures
Particulars
Figure 01: Sales Regions
Figure 02: Sales Process
Figure 03: Organizational Functions
Figure 04: Nestl Brands in Bangladesh
Figure 05: Global Organizational Structure
Figure 06: Organizational Structure in Bangladesh
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1938-1944: in this period World War II were felt immediately upset the business once
again and Profits dropped from $20 million in 1938 to $6 million in 1939. To overcome
distribution problems in Europe and Asia, factories were established in developing
countries; particularly in Latin America. As the end of the war approached, Nestl
executives found themselves unexpectedly heading up a worldwide coffee concern, as
well a company built upon Nestl's more traditional businesses.
1944-1975: The graph of growth sets its trends little higher between 1944 and 1975. As a
result many new products were added as and outside companies were acquired. In Nestl
merged with Alimentana S.A in 1947, purchase of Findus frozen foods occurred in 1960,
Libby's fruit juices joined the group in 1971 and Stouffer's frozen foods in 1973and finally in
1974 the Company became a major shareholder in L'Oral, one of the world's leading makers
of cosmetics. The Company's total sales doubled in the 15 years after World War II.
1975-1981: In 1920s the economic situation was in challenge due to price of oil rose,
growth in the industrialized countries slowed down and worldwide unstable political
situation. In 1975 and 1977 price of coffee bean and the price of cocoa tripled. In this
situation to maintain a balance, Nestl went to second venture outside the food industry by
acquiring the pharmaceutical and ophthalmic product producer Alcon Laboratories Inc. of
U.S; as a result it increased competition and shrink the profit margins.
1981-1995: Improvement of financial situation through internal adjustments and strategic
acquisitions are the two important moves in this period. As a result between 1980 and 1984,
diversification of several non-strategic or unprofitable businesses occurred. On the other
hand Nestl managed to put an end in the third World to about a serious controversy over
its marketing of infant formula in this period. In 1984 Nestl acquire American food giant
Carnation and became one of the largest company in the history of the food industry.
1996-2002: The opening of Central and Eastern Europe, along with China and a general trend
towards liberalization of direct foreign investment was good news for the company. On the other
hand in July 2000 Nestl launched a Group-wide initiative called GLOBE (Global Business
Local Business Policies of Nestl Bangladesh Ltd.
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Dhaka North
Bogra
Khulna Sylhet
Tea
Bunk
Retail Distributor
Ne pendent University,
stl Bangladesh
Nestl
Figure2: Sales Process
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Bangladesh Ltd.
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Day by day demand and trust on the Nestl products are growing.
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No matter how many functions are running, their main aim is to gain ultimate
excellence. Every function contributes from their end to meet the corporate
goal. The General Management take cares of the overall operation of the
company and makes the key decisions. Human Resource focuses the
management of employees and organizational culture; moreover HR
professionals are also responsible for retaining the people who are making
the difference with their competitors at the end of the day. Supply Chain
ensures the stable supply of the products according to the demand of the
customers. Marketing looks after the existing brands, market share and
product development of the products. Nestl is the worlds largest Nutrition
Company that is why the importance of the Nutrition products is much more
in compared to the other food companies; as a result they created a totally
separate team to look after the Nutrition products, such as, CERELAC,
LACTOGEN. Finance and control deals with the financial transactions and
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Beverage
Nescafe
Nestea
Nesfuta
Culinary
Dairy
Maggi, Shade-Magic
Nido
Coffeemate
Breakfast
Cereal
Nutritio
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Comflex
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Kokocranch
Lectoze
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Cerelac
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4.1
brands
relationships
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Building relations with medical and scientific community in light of Nestl Bangladesh
Ltd., this report tried to analyze the following components of marketing strategy through
different theories and applications:
External factors
Social: Nestl makes an effort to integrate itself as much as possible into the
cultural and social values of the different countries. During operation in
Bangladesh Nestl has launched products with integration of social & cultural
factors. This has been done to match the taste buds of Bangladeshi consumers.
Ethical: Although Nestl faces ethical dilemmas in commercialization of its products, it
does not consider its high price to be an ethical crisis. This is because they are not
ready to compromise their quality in order to make their product widely available to all.
Internal factors
Marketing structure: Nestl is more people, product and brand oriented than system
oriented. Nestl favors long-term successful business development and even to greater
extent, customer life-time value. At the same time Nestl does not lose sight of the
necessity to improve in terms of quality, price and distribution. However, Nestl remain
conscious of satisfying the wants needs and demands of its consumers. It is also aware of
the need to generate a sound profit annually.
Nestl seeks to earn consumers confidence, loyalty and preference and anticipate
their demands through innovation and renovations. Therefore Nestl is driven by an acute
sense of performance adhering to quality and customer satisfaction Nestl is as
decentralized as possible within its marketing strategic definitions requiring increasing
flexibility. Nestl is always committed to the concept of continuous improvement of its
marketing.
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activities and customer satisfaction through market segmentation, positioning and target
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The company then effectively communicates and delivers the chosen position to the
market. Nestl strongly believes that their products are specific and so are the product
benefits. This, Foysal Alam, the marketing officer, termed as Benefit Positioning
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Nestl is committed to offering consumers high-quality food products that are safe,
tasty and affordable. The Nestl Seal of Guarantee is a symbol of this commitment.
It also believes in maintaining regular contact with the consumers. This applies both to how
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2. Internal Audit
o Opportunities
o Strength
o Weakness
Threats
Threats: Few local manufacturers who tend to sale their products at a relatively
lower price through various unethical means. For instant, many do not value
expiry dates since not much restrictions are practiced in Bangladesh.High
degree of bargaining power of suppliers.
Internal Audit:
Then we tried to analyze the internal situation of Nestl and we figured out the following
strengths and weaknesses:
A portfolio of products which responds to the consumer trend for lighter yet indulgent
snacking
A unique strategic position which combines powerful local brands with strong global
product brands
Dedicated core staff who are willing to provide significant labor hours to accomplish
targets
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Strengths:
Nestl Weaknesses:
o
1. Marketing Factors
2. Manufacturing Factors
3. Organizational Factors
But these factors are too broad. So, further some criteria were developed for each
factor to be evaluated. Then the relative weaknesses or strengths are measured
Strengths
Fundamental
Strength
Weaknesses
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Marketing Factors:
Manufacturing actors:
Organizational Factors:
Relative Market
Production facilities
Culture
Reputation
Flexibility
Leadership
Previous Performance
Workforce
Managerial capabilities
Competitive Stance
Technical skill
Workforce
Customer Loyalty
Delivery capabilities
Flexibility
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Structure of competition
Adaptability
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Raw Materials:
In general, Nestl is not directly involved in the production of raw materials. Wherever possible,
locally available raw materials are used. They are either obtained directly from producers or
purchased through trade channels. Nestl applies the following principles when sourcing raw
materials: all raw materials must meet both legal and internal quality criteria, including limits on
possible environmental contaminants; whenever possible, preference is given to raw materials
that are produced by environmentally sound farming methods (e.g. integrated crop
management); and farmers are encouraged to apply sustainable farming methods and, where
appropriate, are provided with assistance in crop production and dairy farming. Such assistance
includes the provision of recommendations for the conservation of natural resources (soil,
water, air, energy, and biodiversity) and techniques for reducing environmental impact.
Manufacturing:
Manufacturing comprises all processes that are necessary to transform perishable
raw materials into safe and convenient food products for consumers. Nestl strives to
achieve optimal performance in its manufacturing activities, including the
environmental aspects. As such, the manufacturing practices of the Group:
Respect natural resources by emphasizing the efficient use of raw materials, water and
energy;
Minimize the use of environmentally critical substances;
Continuously seek improvement in the efficiency of production facilities; and
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Reduce waste generation and emissions as much as possible; consider recycling of waste as a
schemes.
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Increase the recyclables and compatibility of its packages with existing waste management
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